Ottawa’s now-cancelled tax on foreign-owned vacant homes delivered little return after administrative costs nearly matched the revenue it generated, according to figures provided by the Canada Revenue Agency.Blacklock's Reporter says records submitted to the Senate national finance committee show the federal government spent $74.5 million administering the Underused Housing Tax while collecting just $81.5 million in revenue beginning in 2023. Finance Minister François-Philippe Champagne formally announced the repeal of the tax on November 4.The levy, created under the Underused Housing Tax Act, imposed a 1% annual charge on the assessed value of vacant or underused residential properties owned by non-resident foreigners. Champagne said its elimination was intended to simplify the tax system and reduce costs for both taxpayers and government.“To simplify Canada’s tax system and reduce compliance costs for taxpayers and administrative costs for government,” Champagne wrote in his budget statement, citing other measures such as the federal foreign buyer ban and existing provincial and municipal vacancy taxes..The Comptroller General confirmed the tax was not collected in 2024, without offering an explanation at the time. Revenue Agency data later showed a steep decline in the number of properties deemed vacant under the program, falling from 6,710 in 2022 to 2,710 in 2024.Administration of the tax required 351 CRA employees, a level of bureaucracy critics said was excessive given the modest returns.“The form is six pages long,” Conservative MP Adam Chambers told the Commons previously. “If they try to figure out whether they qualify for an exemption it is confusing even for sophisticated accountants, and it has to be filed every single year.”Chambers said the tax amounted to forcing homeowners to justify their personal use of property to avoid paying a penalty. “If someone does not use their house for their own reasons, they have to fill out a form and prove it’s allowable,” he said..The Underused Housing Tax was introduced in 2022 by then-finance minister Chrystia Freeland, who argued it was necessary to deter speculation. “Housing shouldn’t be taken over by speculators,” Freeland told senators at the time.In 2024, Freeland floated the idea of expanding vacancy-style taxes to include unused land owned by Canadians, citing Ireland’s Residential Zoned Land Tax as a possible model. Ireland introduced the tax in 2025, charging 3% of market value on vacant serviced lots.While no such measure has been adopted in Canada, Freeland’s department suggested in a consultation paper that taxes on vacant land could discourage speculation and generate revenue to fund new housing construction.
